Solar prices set to fall 33% – Santa Monica says for every home and office, a solar power plant

It seems that whole cities are now going solar:

The Santa Monica City Council voted in April to approve an ordinance requiring rooftop solar systems for all new construction in the City of Santa Monica—both residential and commercial.

Santa Monica joins other California cities San Francisco, Lancaster and Sebastopol in implementing solar requirements at time of construction. The requirements will add between $3.27-3.54/sq ft in construction costs – 33-37% below current solar market prices. The energy savings will more than offset mortgage pricing increases – lowering ownership costs from day one.

Falling pricing, consciousness of climate change and the desire for pollution free skies are all part of a grander trend ending with more solar power. With cities like Santa Monica requiring solar power as part of original construction, we’ll now begin to design specifically to take advantage of sunlight resources. If the National Renewable Energy Laboratory thinks we can get 40% of our electricity from 23-27% of our countries buildings with our current building techniques – imagine when 100% of new structures place a specific dollar value on direction of construction and angles of rooftops (Drake Landing, main image, and the CIS Tower, below, come to mind).

CIS Tower, Manchester

A private home between 1000 and 3000 sq feet will add 1,500W to 4,500W of solar power and a commercial location with a 10,000 sq ft footprint will add a 20,000W PV system. My estimations of these costs based upon my day to day experience, when included at time original construction and without incentives or externality considerations, are $3,539-10,167 for the residential examples, and $65,339 for the commercial project. These prices are 33-37% lower than market prices when built later in ownership. When the cost of construction is integrated into a mortgage – this ordinance will lower the annual costs of ownership between $169 and $1,600. If we allow current 30% tax credits to be applied against the mortgage – those savings increase to $227 a year for homeowner and $3,460 for a small business.

These ordinances will also push building integrated photovoltaics (BIPV) and continue scaling the solar industry (Swanson’s Law). Might this be the next great trend that drives solar power installation costs further down?

Specifically, the update to the Santa Monica Municipal Green Building Ordinance states:

  • NEW SINGLE FAMILY DWELLINGS are required to install a solar electric photovoltaic (PV) system, with a minimum total wattage of 1.5 times the square footage of the dwelling (1.5 watts per square foot).  That means a 2,000 square foot home would need a 3 kilowatt system, which is a typical size already seen on many homes.
  • NEW MULTI-FAMILY DWELLINGS and NON-RESIDENTIAL, HOTEL, MOTEL are required to install a solar electric PV system, with a minimum total wattage 2.0 times the square footage of the building footprint (2.0 watts per square foot of building footprint).  That means a 4-story building, with a building footprint of 10,000 square feet, would need a 20 kilowatt system.

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